Manila: The Bureau of Internal Revenue (BIR) on Thursday filed a criminal complaint before the Department of Justice against Lobelle Commodities Corporation and its corporate officers. This action was taken due to alleged misuse of value-added tax (VAT) exemption privileges on palm olein oil importations, which has resulted in more than PHP262 million in outstanding tax liabilities.
According to Philippines News Agency, the BIR's complaint relates to transactions during the 3rd and 4th quarters of the taxable year 2020. Lobelle Commodities Corporation is accused of failing to pay the VAT due on its palm olein oil imports despite not meeting the required legal conditions for exemption. The violations are said to be in breach of Section 254, in relation to Sections 253(d) and 256 of the National Internal Revenue Code of 1997, as amended.
The law specifies that palm olein oil imports are exempt from VAT only when used in manufacturing finished feeds for animal consumption and when certified by the Food and Drug Administration (FDA) as unfit for human consumption. The BIR's investigation revealed that Lobelle is not involved in manufacturing, casting doubt on whether the imported oil was intended for qualified feed production. Additionally, the oil was reportedly sold to entities not engaged in producing finished animal feeds, and the FDA confirmed no certification requests were made by Lobelle in 2020.
The BIR concluded that the importations were subject to VAT, emphasizing that the tax exemption is a specific privilege that must be used for the purposes allowed by law. The agency stated that the repeated importations and non-payment of VAT suggest a willful intent to evade taxes.
BIR Commissioner Charlito Martin Mendoza commented on the situation, stating, "Tax exemptions are granted for specific purposes under the law. They cannot be used loosely or claimed when the conditions are not met." He further noted the loss of government revenue and the disadvantage to compliant taxpayers when exemptions are abused. Mendoza affirmed the agency's commitment to pursuing criminal action against schemes that undermine the tax system.
In separate cases, the BIR filed criminal complaints against Junn Ryan Tolentino Pucan and Romy Cruzada Claveria for willful failure to pay internal revenue taxes totaling more than PHP8 million for 2019. Investigations showed that both individuals had substantial unpaid taxes, penalties, and surcharges, which they failed to settle despite repeated notices.
Mendoza stressed the importance of responding to BIR notices, explaining that taxpayers are given opportunities to settle their liabilities. However, when assessments become final and executory, continued refusal to pay may lead to criminal action.
